EANS-Adhoc: Precious Woods Holding Ltd. /

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06.09.2010

Media release, 6. 9. 2010

Precious Woods invests in its tournaround

The turnaround introduced in spring of 2009 grew into a profound reorganisation
of the Precious Woods Group. The core objective shared by the Board of
Directors, Group Management and employees is to increase operational
profitability while maintaining the reached high ecological and social
standards. Although the measures introduced are beginning to show initial
results (e.g. at Precious Woods Europe), internal and external factors meant
that, by mid-2010, they had not yet brought about positive figures. Negative
results are i.e. reported in Brazil and - due to the ban on the export of logs
- in Gabon. For the Board of Directors and the Group Management, the focus is
on accelerating the impact of the measures initiated.

The markets for tropical timber products have shown signs of a recovery over
the past few months. Precious Woods (PW) is obtaining better prices for its
products, and sales volumes have stabilized. Our cost-cutting and process-
optimization programs have been showing the first signs of success in Europe
and Central America. However, political restrictions have once again had a
negative effect on the result: in Gabon, the government´s ban on the export of
logs has been enforced rigorously since January 1, 2010. Contrary to
expectations, the export quotas for logs that the government announced have not
yet been approved. In Brazil, the required harvest permit has been granted,
however around three months late and only for a part of the harvest area. These
developments have influenced the negative result of the first half of 2010.

The operative loss is 8.9 million USD.
Following four factors were the main contributors to the operative loss
recorded in the first half of 2010:
• The negative impact of the ban on the export of logs from Gabon (USD 2.3
million).
• An unexpected loss on stored wood in Brazil (USD 0.9 million) caused by
an inventory error (which is currently being investigated with an internal
audit).
• Excessive fixed costs in relation to sales figures in Brazil (USD 2.3
million). These were caused primarily by the extended ban on harvesting due to
the rainy season lasting longer than normal, by the delay in receiving the
harvest permit and by the necessary switch to lower-quality woods.
• The USD 2.4 million drop in the net growth of biological assets in
Central America (compared to the previous year) caused by the change in the
valuation system for plantations introduced at the end of 2009 (see 2009 Annual
Report, page 26).
The Board of Directors and the Group Management find the unsatisfactory
performance at mid-2010 bitterly disappointing given that intensive work is
being put into a profound turnaround. Since fall of 2009 - and with greater
intensity starting at the beginning of this year - measures have been taken to
tackle the above-mentioned causes. However, they are requiring longer than
expected to be effective. The Board of Directors and Group Management expect
the measures to have a greater impact next year and the turnaround to be
completed.

Further information:
Precious Woods: www.preciouswoods.com

Precious Woods
Militärstrasse 90
8021 Zürich
Tel. +41 (0)44 245 81 11
Mail: [email protected]

There will be an investorcall: Monday, 6.9.2010 at 10.00 pm.
Please dial: +41 (0)44 580 65 21.
Participants: Prof. Ernst A.Brugger (Chairman of the board), Joachim Kaufmann
(CEO), Cornelia Gehrig (CFO)

Rückfragehinweis:
Precious Woods Holding Ltd.
Militärstrasse 90
CH-8021 Zürich
Ende der Mitteilung euro adhoc
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Emittent: Precious Woods Holding Ltd.
          Baarerstrasse 135
          CH-6301 Zug
Telefon:   +41 44 245 80 10
FAX:       +41 44 245 80 12
Email:    [email protected]
WWW:      http://www.preciouswoods.com
Branche:  Forstwirtschaft
ISIN:     CH0013283368
Indizes:  SPI
Börsen:   Main Standard: SIX Swiss Exchange 
Sprache:  Deutsch

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